Rent prices reach a record high while arrears fall

The strong performance of the private rented sector in the past year has hardly been a closely guarded secret, with existing and first-time landlords rushing to take advantage of intense demand among prospective tenants.

And as the competition for tenancies has led to a natural increase in rent prices, the latest LSL Property Services Buy-to-Let Index has revealed that this trend held strong during August.

According to the figures, rents reached a record high last month, increasing by 1.2 per cent compared to July.

"The rental market is right in the thick of its peak season, and the demand from graduates and those starting new jobs has added a new layer of competition," said David Newnes, director of LSL Property Services.

"Rents have hit record highs in five regions as tight mortgage finance criteria and large deposit requirements for new buyers continue to ramp up the pressure on the limited stock of rental homes available."

With the average rent in England and Wales standing at £734 per calendar month in August, it seems that landlords have continued to respond to the growing demand for their properties by increasing their charges in kind.

What's more, despite fears that spiralling rent prices would place a more intense strain on the finances of tenants living in the private rented sector, the figures also revealed that there was actually a decrease in arrears last month.

Indeed, nine per cent of all rent went late or unpaid in August, and when this is compared to the 9.3 per cent seen in July, it appears that tenants are adapting to the increasing prices.

Whether or not the trend continues on its current trajectory in the coming months, investors will need to ensure their portfolios are protected with suitable landlord insurance policies to cover any unexpected costs associated with damage.